Agenda item

To consider a report by the Scrutiny Co-ordinator (copy attached) which seeks the Committee, based on written and verbal information provided, to review the Cabinet’s decision of 22 September 2020.

Vote taken: 7 in favour, 0 against, 0 abstentions

 

The Committee:

 

Resolved:  to uphold the decision and to recommend to Cabinet that it -

 

(i)           revisit the decision in light of the vision for future social and affordable housing as set out in the draft new national development framework ‘Future Wales – the National Plan 2040’;

(ii)          therefore delay the decision in relation to this particular site for 12 months until the new national development framework is agreed;

(iii)        consider options to make the land more attractive to social landlords and smaller developers by breaking it up into smaller parcels/plots; and

(iv)        does not create an oversupply of large unaffordable homes in Denbigh which do not meet the local need

 

[This item was considered as a matter of urgency, notice having been given by the Chair at the commencement of the meeting].

 

The Chair introduced a report (previously circulated) on the call-in request submitted in respect of a decision taken by the Cabinet on 22 September 2020 relating to the ‘Disposal of land adjacent to Ysgol Pendref, Denbigh’.  The Cabinet had resolved to –

 

·         approve the disposal of land adjacent to Ysgol Pendref, Denbigh outlined in red on the plan (Appendix A to the report) which is surplus to Council requirements on the open market for residential development and delegates authority to the Lead Member for Finance, Performance and Strategic Assets to approve the final sale, and

·         confirms it has read, understood and taken account of the Well-being Impact Assessment (Appendix B to the report) as part of its consideration.

 

A ‘call-in’ notice had been submitted by Councillor Glenn Swingler, supported by four other councillors.  At the Chair’s invitation Councillor Swingler set out the grounds for calling the review of the decision as follows –

 

1.    This is more land owned by Council being sold for a quick fix to fill budget holes.

2.    Upper Denbigh has up to 300 houses being built on the NWH (North Wales Hospital) site and more (mostly) unaffordable housing is not required.

3.    The land is presently farm land.  We should be encouraging more people into farming.  We don’t yet know the effects of Brexit on food security and now would be a foolish time to dump this land.

4.    Although it mentions the land not being suitable for a new build for Ysgol Pendref it was only a very, very short time ago Cabinet agreed to the new 21st century schools programme and to commence a scoping exercise.  Has that been completed already?

5.    Once land belonging to the people has been sold to private enterprises there is no going back.  How are cabinet certain the land will not be needed in the future.

6.    We must surely be building more social housing.

 

The Lead Member Councillor Julian Thompson-Hill, Programme Manager – Housing Development and Principal Valuation and Estates Surveyor were in attendance.  The Lead Member clarified the location of the site in Denbigh which related to 6.97 acres.  He also responded to the grounds put forward for the call-in request as follows –

 

·         the land was held within the Housing Revenue Account (HRA) and therefore any capital receipt from the sale would be ring-fenced for the HRA and could not be used elsewhere.  The HRA had three sources of income to deliver its programme of works for which capital receipts was a key element.  An assumption about the sale of the land had been built into the rolling 30 year housing stock business plan so if a capital receipt could not be achieved there would be less funding available to deliver new social rented homes or maintenance on existing housing stock

·         in terms of housing numbers in the current Local Development Plan (LDP) there was no inclusion for any of the enabling developments at the North Wales Hospital Site currently and the council’s allocations and affordable housing policies made no assumptions of any affordable units on that particular site.  This site, amongst others, had been allocated to partially address housing needs for all kinds of tenure within Denbigh and would deliver twice the number of affordable units that would be required under the terms of the LDP

·         the land was not farmland having been allocated for residential purposes in the LDP in 2013 following all the appropriate processes and consultation stages.  The land had been declared surplus to agricultural estates purposes in 2015 and appropriated into the HRA in 2016.  Subsequent to that a Site Development Brief had been adopted approved unanimously by Planning Committee in 2017.  The former tenant of the farm to which the land was previously attached had purchased most of the land holding he had previously rented but this particular land was specifically excluded from that purchase by him

·         the council’s disposals protocol as applied in this case was explained for which only the HRA indicated a requirement for the land.  Although the recommendation on sites to go forward for Band B of the 21st Century Schools Programme had only been discussed at the last Cabinet meeting, the Education Department had been fully aware of the proposals for this land and had advised that they would not be looking to this particular site for education purposes and supported the appropriation of the land to the HRA

·         in terms of social housing there was a 30 year business plan with headroom to build 220 additional properties (170 within the lifetime of the current Corporate Plan).  There was insufficient headroom in the business plan for the council and social landlords to meet all social housing needs which was a common situation not unique to Denbighshire.  The number and location of additional housing developments were determined following an analysis of the single housing register making allowances for any schemes underway and the condition and suitability of existing housing stock.  Denbigh accounted for approximately 10% of the overall need and a recent contract was awarded for 22 social rented homes on land adjacent to Tan y Sgubor.  Soft market testing had determined 20% affordable inclusion would be viable on the land proposed for disposal which would address part of the identified need and also deliver a capital receipt to support the business plan for new build and maintenance.  It was emphasised that a maximum of 10% affordable housing could be enforced and any amount above that would need to be achieved through negotiation.

 

In summary the Lead Member reiterated that the site was an isolated piece of land, not required by the former tenant farmer which was surplus to requirements from an agricultural estates purpose, and had been appropriated to the HRA and allocated for residential purposes in the LDP following due process.  A Site Development Brief had also been approved by the Planning Committee and therefore the principle of housing development on the land had been well established.  The council was extremely unlikely to have the capital to build a scheme of 100 homes as a stand-alone development but in a developer role could utilise public and private sector partners which was a common practice of the council on various developments.  The Programme Manager – Housing Development added that the sale of the site would help deliver the housing development plan and a balanced approach had been taken to ensure that the properties delivered were the right type in the right place.  Given the limited resources available for delivering the housing stock business plan, the capital receipt from the site and social rented homes it would deliver would go towards delivering that plan.

 

The Chair invited questions from Committee members followed by call-in signatories and other non-Committee members.  Questions were raised regarding the number of houses and types of housing developments currently being built or already planned for Denbigh, particularly in terms of affordable and social rented housing and needs of local residents.  Councillor Rhys Thomas referred to the draft new national development framework ‘Future Wales – the National Plan 2040’ and implications for future housing developments and meeting affordable and social housing needs.  He was keen for those ambitions to increase delivery of affordable and social housing together with the funding to drive delivery to be progressed for the benefit of local residents in Denbigh, particularly given the specific housing needs of the area.

 

The Lead Member and Programme Manager – Housing Development responded to members’ questions and comments as follows –

 

·         disposal on the open market had been recommended given the potential value of the land and the price could be verified independently to ensure best value

·         enquiries had been received from social landlords about the development and there was nothing to preclude social landlords making an offer for the site

·         whilst the current requirement for affordable homes was 10% there had been occasions when a higher percentage had been agreed through negotiation

·         due to the need to put infrastructure into the site such as highways, utilities etc. it would be more cost effective if one developer was to take on the initial opening up of the site rather than breaking the land down into smaller plots – potentially the developer could pass on smaller blocks to other social landlords

·         the site did not have outline planning permission but a Site Development Brief had been approved by Planning Committee in 2017, and the reports to Planning Committee and more recently Cabinet had prompted developer interest

·         confirmed any developer could approach the council at any time but in order to ensure best value it was usual to first undertake market testing of the site

·         the proposal was for around 20 social rented homes on the site and a contract had recently been awarded for a further 22 social rented homes on adjacent land at Tan Y Sgubor thereby totalling 42 additional social rented homes for the ward let through the council’s HRA

·         local authorities would be able to access Welsh Government’s (WG) social housing grant from April 2021 but the funding would be top sliced from existing budgets and would be a finite amount for which local authorities would bid against each other and would also likely need to contribute financially.  The intervention rate of 58% for social landlords would be protected and the amount to local authorities was not expected to be sizeable and would be a variable intervention rate depending upon the viability of each individual development – there was no new funding announced by WG in relation to any commitment to increasing affordable housing.  It was also understood that references within the new national development framework to affordable housing led development sites would only apply to future allocations and not to this site because it was an existing allocation

·         given that the intention was to use the capital receipt from the sale of the land to fund the housing stock business plan any delay would reduce the number of properties which could be delivered as a consequence

·         the proposal would benefit the ward by delivering twice as many social rented homes as would normally be the case through the planning system.  Even if properties were not in the affordable category they still brought benefits to the area in terms of trade, spend and jobs and reference was made to the approach in Rhyl West where part of the regeneration activity involved a mix of tenures

·         if the sale of the land did not proceed there would potentially be the loss of 20 affordable units and given previous approvals the housing stock business plan had assumed a capital receipt for reinvestment in new build and renovations which if not received would have a negative impact on its delivery

·         there was an unmet demand for both affordable and non-affordable housing in Denbigh and Denbighshire as a whole and the programme of work that had been developed and agreed was proportionate to the need and the location.

·         the SARTH (Single Access Route to Housing) figures referred to should be read in context given that applicants could register for multiple areas

·         it was accepted that the entire social housing need could not be met and the approach taken was to deliver as many social rented properties throughout the county to reflect that need within the resources available and capital receipts were a vital part of providing the funding necessary to address those issues

·         explained the naming and numbering policy adopted by the authority and elaborated upon the biodiversity elements associated with the proposal

·         there was currently no buyer for the site and the current process involved seeking Cabinet’s permission to sell the site on the open market.

 

In summing up Councillor Swingler supported delaying the sale of the land pending clarity on the Welsh Government’s new national development framework in order to best meet local housing needs for residents and ensure the right type of housing for the area or alternatively to ensure best future use of the land for other purposes.

 

In his closing statement the Lead Member reiterated that the site had been though the necessary approvals and consultations and had been allocated for housing in the LDP.  Not selling the site would impact on the resources available to deliver the housing stock business plan and he strongly recommended that the sale proceed with no benefits to be gained from delaying the sale.  Any changes to legislation coming forward for future sites would be complied with and if any additional funding was made available it would be welcomed.  Proceeding with the sale would likely deliver twice the amount of affordable housing stipulated in the LDP and market testing had indicated that 20% affordable housing would be viable and deliverable and it would go some way to addressing housing needs within the county.

 

Having considered the information presented and representations made during the meeting, including the grounds given for calling-in the decision, the Committee acknowledged that the land had been declared surplus to requirements by the council’s agricultural estate a number of years previously.  It also acknowledged that any capital receipt realised from the sale of land or any other asset could not lawfully be used to finance the authority’s revenue spend or any revenue shortfall.  However the Committee felt there was merit to request Cabinet to review its decision to dispose of the land on the basis of the number of houses and types of housing developments currently being built, or already planned for Denbigh in the next few years.

 

The Committee had concerns that the developments would render the town with an oversupply of large unaffordable houses and an insufficient supply of affordable housing and social housing units to meet the needs of local residents.  Members were of the view that developing the land adjacent to Ysgol Pendref would further exasperate the problem.  Whilst acknowledging that some social housing would be built on this plot of land as part of any future development, it was felt that the number of affordable and social housing units proposed for the development were insufficient given that this particular plot of land was located in one of the most deprived council wards in Wales, and therefore the majority of the houses built there would be unaffordable for local residents.

 

The Welsh Government had recently published its draft new national development framework ‘Future Wales – the National Plan 2040’ which was currently undergoing scrutiny in the Senedd, prior to being adopted in 2021.  Once adopted this framework would set the direction for development across Wales until 2040.  Whilst the Committee acknowledged that this was still a working draft it did however have a clear emphasis on the need for more affordable housing across Wales.

 

Councillor Graham Timms put forward a proposition on the basis of the conclusions of the Committee, seconded by Councillor Glenn Swingler, and upon being put to the vote the Committee –

 

RESOLVED to recommend to Cabinet that it –

 

(a)       acknowledges the Communities Scrutiny Committee’s conclusions and recommendations following its review of the Cabinet decisions of 22 September 2020;

 

(b)       revisits its decision of 22 September 2020 having regard to the vision for future social and affordable housing as set out in the draft new national development framework ‘Future Wales – the National Plan 2040’;

 

(c)        delays the decision in relation to this particular site for 12 months until the new national development framework was agreed;

 

(d)       considers options to make the land more attractive to social landlords and smaller developers by breaking it up into smaller parcels/plots, and

 

(e)       does not create an oversupply of large unaffordable homes in Denbigh which do not meet the local need.

 

The meeting concluded at 1.45 p.m.